Summary
- Rapid7's SIEM and SOAR solutions comprise less than 40% of revenue generation and serve as strong future catalysts.
- Total ARR growth of 76% in the past 8 quarters serves as a promising indication of the company's growth opportunities.
- Future revenue streams will be a function of International and Enterprise expansion along with successful penetration of the SIEM and SOAR markets.
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In an increasingly digital world, cybersecurity is becoming more and more essential to large and small businesses alike. At the center of this transition is Rapid7 (RPD). With ~28% Revenue growth over the last three years, Rapid7 is a promising company in a broad and expanding cloud-based market. The cybersecurity company is focused on enhancing resolve and efficiency for customers who face constantly evolving cybersecurity challenges. With its diverse portfolio of products, Rapid7 is uniquely positioned to be a leader in the cybersecurity market for years to come.
Product Overview
The company's main revenue driver is in the Vulnerability Risk Management (VM) space. According to the 2019 Forrester Wave Report, Rapid7's InsightVM saw a potential 342% ROI within three years. In addition to this astonishing number, customers also saw a decrease in cybersecurity spending and incident volume. This is evidently a compelling argument for Rapid7 as a leader in the Vulnerability Management space where it competes with Qualys (NASDAQ:QLYS) and Tenable (NASDAQ:TENB).
Rapid7 also has products in:
- Security Information and Event Management (SIEM)
- Application Security
- Security Orchestration and Automation Response (SOAR)
The company's SOAR solution is called InsightConnect. This product allows customers to customize workflows and tools with over 290 plugins. On the company's 4Q 2019 Earnings Call, CEO Corey Thomas mentioned plans to accelerate investment in this solution in 2020. While in the early stages of its development, he views it as an emerging product in North America.
InsightIDR is the company's SIEM solution, which currently makes up more than 20% of revenue. InsightIDR's competitive advantage lies in its ease of use and seamless cloud capabilities. Thomas noted on the 1Q 2020 earnings call, it is one of the few solutions that natively collects endpoint data from the cloud no matter where people are staffed in the world. This solution saves customers the pain of setting up core infrastructure and seamlessly gathers key end to end data points. This end to end solution is specifically advantageous as companies move toward an increasingly remote work environment.
To sum up the exciting opportunity of these two products, here is what Thomas had to say on the 4Q 2019 Earnings Call regarding new market penetration:
"So you saw that dynamic, especially with IDR last year as for the first year that really became much more of a global business and we think there is lots of growth in IDR over the next couple of years and that's a catalyst. Likewise with SOAR...we do expect some momentum if we continue to see progress on a global basis."
